Singapore Budget 2023 Feedback has been saved
Singapore Budget 2023 Feedback
A Valentine's Budget for Singapore
Singapore’s GDP is expected to grow at a slower rate of 0.5% to 2.5% in 2023 amidst continued global supply and energy disruptions. The slower growth forecast, however, should have no significant impact on long-term strategies for transitioning to a more digital, inclusive, and green economy. We expect Budget 2023 to address key challenges such as maintaining the economy's competitiveness and keeping living expenses manageable in an inflationary environment, amongst others.
On the domestic front, Singapore's current R&D tax regime has been in place for nearly a decade, and we believe it is past time to make it more "sophisticated" and relevant to claimants. As other countries continue to introduce and improve R&D tax incentives, our proposals seek to refine Singapore's current broad-based R&D regime in order to maintain Singapore's preeminent status as a key regional innovation hub.
In terms of international tax developments, the OECD BEPS 2.0 tax reforms has reached a significant milestone with member states of the European Union reaching a preliminary agreement on Pillar Two, which calls for a minimum level of taxation for the largest corporations. Pillar Two and its potential impact are high on many clients' agendas, and this is expected to increase. We suggest taking time to review, evaluate, and formulate a streamlined response on suggested mechanisms in light of the OECD report on tax incentives and the Global Anti-Base Erosion rules (GloBE rules). Meanwhile, we propose that the Singapore Government commissions a technical study or analysis of what other similar tax jurisdictions are doing or plan to do in response to a post-BEPS environment. This research could explore the potential benefits of using Qualified Refundable Tax Credits,R&D tax credits, etc., as well as provide examples of other jurisdictions that are implementing these.
Climate and sustainability remain a key concern for Singapore. Against the backdrop of an energy crisis, extreme weather events and the corresponding economic ramifications, companies and governments around the world are becoming more concerned about the need to be environmentally responsible amidst intense political and burgeoning consumer pressure. In keeping with Singapore's commitment to addressing climate change challenges and meeting Paris Agreement goals, our proposals seek to accelerate the transition to a green(er) economy while also providing feedback on the recent Draft Carbon Pricing (Amendment) Bill.
Aside from the foregoing, we have also included sector-specific recommendations, broad-based business tax recommendations, as well as GST and personal tax recommendations.